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N.J. Hospital Accused of Price Gouging

Insurance companies claim Meadowlands Hospital Medical Center bills as much as 3,000% more than its ASCs charge same treatments.

Published: September 20, 2011

$90,000 for a knee arthroscopy. $67,715 for a steroid injection. $161,510 for a plasma back injection.

Those are just some of the exorbitant fees that insurance companies claim a for-profit northern New Jersey hospital is charging for providing auto accident victims with outpatient care, according to a report published in Newark, N.J.'s Star-Ledger on Monday.

The hospital in question - Meadowlands Hospital Medical Center in Secaucus - is run by outpatient surgery center operators, having been purchased by 3 nearby centers in December: Essex Surgery Center in Hackensack, Roseland Surgery Center in Roseland and Bergen Ambulatory Surgery Center in Saddle Brook. It is charging as much as 3,000% more than the ASCs charge for the same treatments, according to the report, which alleges that the ASCs have been referring auto accident victims from their facilities to the hospital to take advantage of a fee loophole. New Jersey limits what ASCs may charge, but it doesn't regulate what hospitals may charge for most outpatient care.

To close this billing loophole, state insurance officials have proposed capping what hospitals can bill for 2,000 never-before-regulated outpatient procedures. In a letter, hospital officials have asked the governor to "join us in opposing any effort to impose ambulatory surgical rates on all services performed at hospitals." Surgery centers, the letter continues, "do not share a fraction of the costs of operating a hospital and are not burdened with charity care. Paying hospitals and (ambulatory surgery centers) at the same rate is simply unfair.''

During a hearing before the Senate Health, Human Services and Senior Citizens Committee, Tom Gregorio, the hospital's president and CEO, admitted that the hospital charges far more than others to care for auto accident victims, but claimed auto insurers pay only a fraction of that. Mr. Gregorio says the hospital gets only about 7% of what it bills to treat accident victims in their outpatient surgery and pain management center. However, the Insurance Council of New Jersey counters that Meadowlands is reimbursed significantly more than the 7% percent it bills.

Dan O'Connor

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